Thirty years after its founding, the San Francisco AIDS
Foundation – which is marking the anniversary this year – is the
largest HIV/AIDS-based nonprofit in San Francisco.

With a budget forecast to be just over $24 million this
year, the agency, which provides services ranging from HIV testing to syringe
exchange, has a lot of money to work with as it strives to drastically reduce
new HIV infections in the city.

As of late 2011, about half of the funding the city's HIV
Prevention Section was providing through contracts was going to the AIDS foundation
and smaller agencies with which the AIDS foundation is working. The foundation
serves approximately 14,000 clients. (An unduplicated count isn't available.)

But the nonprofit, where several staff earn $100,000 and up,
receives less-than-stellar rankings on how much it spends on programs versus
fundraising and other areas, and officials there are working to change that.

"We are investing like never before in San Francisco in
regards to reducing HIV infections, getting people tested, and getting people
into care," said AIDS foundation CEO Neil Giuliano, a gay man who joined
the agency just over a year ago after a stint leading the national Gay and
Lesbian Alliance Against Defamation.

Giuliano said that when he evaluated the AIDS foundation
after his arrival, what struck him was that to invest more in the community,
"we were going to have to adjust things internally."

That's included what SFAF spends on fundraising. According
to its most recent tax documents, 21 percent of the foundation's total expenses
during fiscal year 2010-11 went toward fundraising.

At least two national charity rating organizations indicate
that cutting costs in this area is where the AIDS foundation should focus.

At the Bay Area Reporter's
request, Charity Navigator staff examined financial data from the nonprofit for
last fiscal year.

They gave the AIDS foundation a preliminary financial score
of two out of four stars.

Sandra Miniutti, Charity Navigator's vice president of
marketing and CFO, said that despite improvements, SFAF's fundraising costs are
"still a little bit high."

The nonprofit's expenses for the fiscal year ending June
2011 were $20,999,560. Of that, it spent $4,410,012 – or 21 percent
– on raising money. Miniutti said most charities spend 10 percent or less
in this area.

She said, though, that the AIDS foundation is "on the
right tack," and if SFAF were "a little bit more efficient in terms
of how they fundraise," the score would improve.

In the fiscal year ending June 2010, the agency's total
expenses were $18,672,130. It spent $4,756,384, or approximately 25 percent, on
fundraising.

Another area of improvement has been the portion of money
the AIDS foundation spends on programs.

Of the expenses for the 2010-11 fiscal year, $15,840,803, or
about 75 cents of every dollar spent, went to programs, according to their tax
documents.

In the 2009-10 fiscal year, the foundation spent
$12,223,217, or approximately 65 cents of every dollar, on programs.

"We're looking at these issues," Giuliano said.
"We obviously take them seriously."

One of the steps the AIDS foundation has taken to save on
fundraising costs is eliminating its participation in the Seismic Challenge
bike ride and the Wildflower Triathlon. Those two changes, which save about
$200,000, "will be reflected in next year's tax filing," he said.

Asked what figure the agency is working toward, Giuliano
said, "I can't tell you today there's an actual percentage. We're
evaluating all of our different fundraising platforms" with regard to the
costs.

On accountability and transparency, Charity Navigator has
given the AIDS foundation four stars. The agency outpaces most other San
Francisco nonprofits in the amount of financial data it posts online.

To add to the other gauges it already uses, Charity
Navigator has been trying to develop a way to measure outcomes. Miniutti said
they "hope to have something to test" in at least one area by the end
of the year. She said different types of charities would have different criteria.
She indicated, however, that they wouldn't get to health-related groups soon.

Meeting needs

While Giuliano said the Charity Navigator information is
important, it's not the only benchmark.

"I certainly hold some value" in tools like
Charity Navigator, he said, but "What's more important to me is that we're
meeting the needs of the community."

With a boost in funds from acquiring many of the city's HIV prevention
contracts, the AIDS foundation is getting some more opportunities to do that.

Newer programs include the Stop AIDS Project, a smaller
organization that was experiencing financial difficulties and merged with SFAF
last November.

In 2007 SFAF assumed oversight of Magnet, the gay men's health
center in the Castro, and the Stonewall Project, which offers substance abuse
treatment to gay and bisexual men.

The AIDS foundation has 130 employees. There were 95 when
Giuliano started.

In interviews, two clients of Magnet expressed appreciation for
the AIDS foundation's services. They didn't seem concerned about the agency's
financial details.

Dean Rodgers, 28, goes to Magnet about once every six months
for testing, and heÕs also a volunteer there.

Rodgers said he likes the "community feel" at Magnet.
SFAF's financial details aren't something he thinks about, he said, and the
Charity Navigator rating doesn't mean anything to him. He said he's always felt
like he's gotten "100 percent" of what he needs.

Another one of the people benefiting from the AIDS
foundation's services is Scott Smith, 38. In a January interview, Smith said he
goes to Magnet every six months to get tested for HIV and other STDs. He always
practices safe sex, he said, "but you never know. I've heard of condoms
breaking."

Magnet has "made it much easier for me to get tested
and know my status, and there's peace of mind in that," Smith said.

Smith has also raised money for SFAF through participating
in the AIDS/LifeCycle, the annual bike ride that benefits the foundation and
the L.A. Gay and Lesbian Center. The 2011 ride raised a record $13.1 million.

Smith said he doesn't think about the AIDS foundation's
finances, and he said he was unaware of salary figures for Giuliano and other
agency staff.

Giuliano said the AIDS foundation wants to provide
competitive salaries and "retain high-caliber talent. That's what our
clients deserve, and that's the level of service we have to provide."

Giuliano's salary is $249,000. The total for the AIDS
foundation's leadership team, which consists of Giuliano and five other people,
was more than $1.1 million.

James Loduca, the AIDS foundation's vice president of public
affairs, provided a list of his and other leadership team members' salaries
– all make six figures – but he wouldn't say how many of the
agency's other staff earn $100,000 or more.

Another score

At the B.A.R.'s
request, staff at CharityWatch, another national ratings organization, examined
SFAF's financial information for fiscal year 2010-11. It gave the nonprofit a C,
or "Satisfactory," grade.

According to its calculations, the portion of total expenses
that are spent on programs is 68 percent, rather than the 75 percent that appears
most obvious in the AIDS foundation's tax filing.

CharityWatch President Daniel Borochoff said that's because
the AIDS foundation counts the educational message in its solicitations as a
program expense, and CharityWatch doesn't.

The charity-rating group also looks at how much it costs an
organization to raise $100.

CharityWatch calculated it takes the AIDS Foundation as much
as $47 to do that. He said if it weren't for the high fundraising costs, the
AIDS foundation would be in the B, or "Good," grade range. To get
there, SFAF's cost to raise $100 would have to be in the range of $16 to $30.

Giuliano wasn't available to address questions related to
CharityWatch Tuesday, April 3.

However, in an email Tuesday, Loduca said, "We have
invested heavily this year in expanding our free local programs and services
for the community. While the ratings agencies are not our only guide, we take
our responsibility to the community seriously and have been taking a very close
look at all our fundraising platforms and have eliminated some and modified
others."

Roger Doughty, executive director of the San Francisco-based
Horizons Foundation, which has distributed millions of dollars over the years,
urged some caution when considering the charity ratings.

"They can be extremely useful," he said, but they
"can also lend themselves to overly simplistic analysis." Doughty
said it's important to look at trends over time, among other things.

Dan Dodd, 46, is a donor to the AIDS Foundation. His
contributions include underwriting the AIDS/LifeCycle kickoff party for the
last two years, at a cost of $5,000 each time. He's participated in the bike
ride for the past six years. He estimated that altogether, he's raised more
than $50,000 for the AIDS foundation, in addition to backing the kickoff
parties.

Dodd said the low Charity Navigator figures wouldn't impact
his support of the organization.

"The passion and drive of everyone there that I've come
into contact with is second to none," he said.